2021 AIM Summit: What it takes the UAE to become the next global crypto hub

While cryptocurrency adoption in the Middle East is reaching an all-time high, experiencing a 400% growth between 2013 and 2016, industry experts shared their insights on digital assets and the future of finance in a panel session moderated by Arabian Business’s editor-in-chief Scott Armstrong.

Since 2015, the AIM Summit has become a platform for discussions on investments, global markets, and the latest trends. The AIM Summit is bridging the West and East through its global network base. It has created an ecosystem of 135,000 fund managers, institutional investors, sovereign wealth funds, family offices, and financial associations.

“Necessity is the mother of invention,” claimed Terry Culver, CEO of Matrix, at the summit. “I’m struck by a common and fundamental misconception about virtual assets … we often think about visual assets as fundamentally a technological innovation. In truth, it’s really driven primarily by social and economic needs.”

The MENA region experienced a 400% growth in alternative finance investments between 2013 and 2016, according to the Global Findex.

Culver emphasized that understanding the reasons behind this asset class’s substantial growth is fundamental, while work still needs to be done in terms of the technology and regulation.

“Some of these reasons may reflect the failures of the current financial system, the growing income disparity across the world, and the absolute hunger by people in both mature and emerging economies that want to participate in the financial system,” he added.

Tone Vays, a crypto trader and analyst, offered a different perspective.

“If we put Bitcoin aside and we talk about everything else in the crypto space, such as Ethereum, I have always been a little skeptical about the rest,” he said. “While the space is continuing to grow and people continue to invest a lot, I think that it’s not as decentralized as they claim. Eventually, the world would look very similar to the current world, just with different people.”

Haydn Hammond, sales director at Invictus Capital, shared his thoughts on how the financial world has advanced beyond their initial doubts.

“Now we see JP Morgan beginning to offer some clients exposure to certain crypto funds and we’ve seen Morgan Stanley enter the realm,” he said. “We’ve also seen some of the world’s largest asset managers, including Blackrock, come to the market and banks are transitioning over to the crypto space. The amount of advancements these players are bringing into the crypto space is going to be a substantial driver of price.”

“The fact that virtual assets are in the headlines doesn’t mean it’s new – it means that it’s risen to prominence because of investor interest,” Culver added. “In terms of if they are robust enough to be resilient, I think if you look at the way they’re developing and the amount of capital flowing into the space, these are promising signs.”

Joel Dietz, the founder of ArtWallet, added: “I think regulation is going to continue, but I don’t think we should necessarily be afraid … in fact, regulations will encourage more institutions to come in because they feel much safer in that environment.”

Looking at the UAE’s pioneering experience in the institutional regulations that are favorable to innovations and investments, the panelists discussed the chances of the UAE becoming a global crypto hub.

“This is exactly the right place to be for our exchange and business … the policy framework is forward-looking and global in nature … there’s also a community of well-educated financial experts who are interested in this asset class and can help it grow over,” Culver answered.

“I do think the opportunities are very good in this region,” Vays added. “And a lot of people I know in the crypto space have moved out here.”

As recently reported, CEO of Bittrex Global Stephen Stonberg praised the efforts of the UAE authorities to poise a crypto-friendly positioning of the region. Helped by the region’s status as a tax haven, Dubai is poised to benefit from the growing cryptocurrency market in the Middle East, he said in an interview with Bloomberg.

“I think Dubai is going to do fantastically well,” as it adopts cryptocurrencies, Stonberg claimed.